Gold Price (XAU/USD) picks up bids to consolidate recent losses at around $1,840 during Monday’s Asian session, following the heaviest weekly fall since early May. While headings surrounding China appear to favor the corrective pullback, fears of global recession and higher Fed rates keep the metal buyers cautious amid a quiet session.

That said, a piece of news from Reuters saying, “President Joe Biden’s administration is reviewing the removal of some tariffs on China,” joins upbeat covid news from Beijing and Shanghai to favor the market’s cautious optimism, which in turn favors the gold buyers.


On the other hand, the Washington Post (WaPo) raised fears of a tough new economic climate due to the US Federal Reserve (Fed) rate hike of the 75 basis points (bps). The news mentioned that the Fed’s rate hike launched a high-stakes test of the economy’s ability to shed its dependence on limitless credit and tolerate higher borrowing costs for consumers, businesses and the government.

Also supporting the fears of recession, as well as hawkish Fed bets, were the key US central bank policymakers namely Minneapolis Fed President Neel Kashkari who backed another 75 bps rate hike in July. Furthermore, Treasury Secretary Janet Yellen also mentioned her expectations of a slowdown in the economy but ruled out recession concerns.

Amid these plays, Wall Street benchmarks closed mixed and the US Treasury yields remained pressured. However, the S&P 500 Futures print mild gains by the press time.


Moving on, gold traders should pay attention to Fed Chairman Jerome Powell’s Testimony for fresh impulse as the Fed Boss is likely to be questioned on inflation woes to justify the recent rate hike.